Crypto.com has recently found itself at the center of controversy after revelations emerged regarding a data breach linked to the notorious cybercriminal network known as Scattered Spider. This breach, which had been previously undisclosed, has drawn sharp criticism from industry observers and influencers, particularly as the exchange announced its investment in Moonlander, a decentralized perpetual futures exchange.
On September 19, Bloomberg published an article detailing Scattered Spider and its string of infiltrations, including a breach of a Crypto.com database. Insights for the report came from Noah Urban, a member of the group who is currently serving a ten-year sentence for his role in various cybercrimes. Urban described how social engineering tactics facilitated the breach, raising alarms about the security protocols of prominent platforms like Crypto.com.
Following these disclosures, crypto influencer ZachXBT openly criticized Crypto.com, alleging that the company had attempted to cover up the incident, which affected the personal information of its users. On social media platform X, he stated, “Your team covered up a breach that impacted the personal information of your users,” adding to the growing concerns surrounding the exchange.
In a bid to counter these accusations, Crypto.com CEO Kris Marszalek took to social media on September 22 to address the claims. He asserted that any suggestion of a cover-up was “completely unfounded,” arguing that the incident was contained swiftly and that no customer funds were at risk. However, Marszalek’s assurances have not quelled skepticism; critics point out that while the company might have reported the incident to regulatory bodies, there is no indication that it informed the users whose data was compromised.
ZachXBT responded sharply to Marszalek’s statements, suggesting that the scope of the breach involved more substantial data than the “partial Personally Identifiable Information” claimed by the CEO. He referenced other incidents where user data such as balances, names, emails, and phone numbers were leaked, heightening the scrutiny on Crypto.com.
Amidst the backlash, Crypto.com had also announced its investment in Moonlander, positioned as an alternative within the Cronos ecosystem to the well-established Hyperliquid exchange. Moonlander is touted for its sophisticated on-chain trading capabilities, offering substantial leverage and security features aimed at attracting users in an increasingly competitive decentralized finance landscape.
Despite the potential of Moonlander, the negative reaction to the data breach risks overshadowing Crypto.com’s strategic move into decentralized finance. As rivals like Binance-backed Aster Decentralized Exchange begin to gain ground, the swift evolution of the market places additional pressure on Crypto.com to not only enhance security measures but also to rebuild trust within its user community. The unfolding situation compels Crypto.com to navigate these turbulent waters carefully as it expands its offerings in the decentralized finance sphere.
